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Halftime Report: Tide Turning For Euro?

Friday, 26 Feb 2010 | 1:22 PM ET

Stocks took a snow day on Friday with not a single sector trading up or down more than a half of a percent by lunchtime.

However that doesn’t mean there isn’t money to be made in this market.

The Fast Money is watching the euro, which made a big move higher as traders covered short positions after Greece revealed higher-than-expected budget revenues and reports suggested Athens will receive aid from a German bank.

Fast Money Halftime: Word on the Street
The Fast Money team discusses the markets and currencies.

How should you trade?

There’s a record net short position in the euro, reveals veteran trader Gary Kaminksy. It’s a very crowded trade right now. Personally, I think there’s a hedge fund cartel being established on the other side of the trade to create this tug of war. But long-term I believe the euro goes lower. And I continue to be short Europe with a long position in the EPV.

Short euro is a dangerous trade, says Dennis Gartman. There is a huge short interest. However, if you are short I would not be panicked by Friday's rally. It’s short covering at the end of the month and it's to be expected.

If you’re looking for a trade, I’d look at playing three currency ETFs, says Joe Terranova. They are FXA , FXC ,and FXF.

With a snow storm blanketing NYC I think investors traded on Thursday as if it was their end of the week and end of month, muses Pete Najarian. Considering the market is so quiet I’m more focussed on next week. I think we could see the market rally on Monday because of the mutual fund Money phenomenon.

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EAR TO THE WALL: JDS UNIPHASE

Shares of JDS Uniphase moved sharply higher on Friday, but the real action was in the options pit. Nearly 11,000 contracts of the March 11-strike calls traded hands.

What must you know?

It's run already, but the options action suggests to me the stock could go even higher, says Pete Najarian.

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MARKET BUZZKILL: AIG LEADS FINANCIALS LOWER

Say what you want about Treasury Secretary Tim Geithner, but don’t say he’s a stock picker.

A couple weeks back in written congressional testimony, Geithner said, the situation at AIG was 'substantially better' with AIG’s insurance subsidiaries generating positive returns."

Fast forward to Friday when AIG posted an $8.9 billion-dollar loss and said it may need more taxpayer money.

What must you know?

I’m shocked that the main stream media hasn’t focused more on this issue, says Gary Kaminksy. What happened to providing proper guidance? This is a disaster.

If you’re a retail investor looking at AIG, remember pro traders look at this stock as a trading vehicle only, says Pete Najarian, not as a long term investment.

Elsewhere in the financials, I’m a seller of the regional banks, says Joe Terranova. Or if you’re looking for a buy, look at Morgan Stanley.

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TRADE SCHOOL: BIG FUNDS GETTING FOCUSED IN FEBRUARY

Friday’s Halftime Report broadcast from the floor of the NYSE, the epicenter of the big money universe. Steve Grasso of Stuart Frankel works the floors each day following the money.

We asked him, 'what are large mutual funds doing as as we close up the last trading day of February?'

Funds are scaling back their positions, explains Grasso. And they’re focusing on best of breed. Right now that benefits JPMorgan , Apple and Deere.

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WORST WINTER TRADE

When it's cold - people heat their houses. That typically fuels demand for natural gas and gives some sort of bid to the commodity.

But a curious thing has happened. Despite the brutal winter, nat-gas has not gotten its seasonal bounce.

What must you know?

There’s a lot of nat gas in storage, says Dennis Gartman. And the industry has discovered new sources of nat gas. In other words with so much supply, I don't think this is good place to play.

If you want to play energy, I’d play it with oil , adds Joe Terranova.

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FAST EXCLUSIVE: OUTLOOK FROM NEW U.S. KING OF STEEL

Economic data is, of course, useful, but if you really want to know what's going on with the economy you need to take a good hard look at steel.

And who better to provide the latest insights than the boss of Nucor , Dan Dimicco.

What does demand reveal about global growth? And does Nucor have plans to make acquisitions? Watch the video and find out now!

Worst Winter Trade
Discussing natural gas and an outlook on steel, with the Fast Money traders and Dan Dimicco, Nucor CEO.












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TAKE YOUR POSITION: BERKSHIRE

You only have a short while left if you want to buy shares of Berkshire Hathaway ahead of results. Should you get in?

T2 Partner Tilson told us on Thursday’s Halftime Report, 'I’m a buyer of Berkshire'. He thinks the intrinsic value of B-shares is about $100 a share. Right now, it’s probably trading at a 20% discount.

And on Thursday's 5p show Karen Finerman said there's no need to rush into Berk-B. It's a long term story.

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BIG MONEY: BLOCK TRADES

Shares of Coke climbed towards positive territory after a number of block trades. Coke usually trades about 10 million shares, but by 12 noon it had already traded over 13 million.

What should you make of it?

Coke pulled back and it gave investors a chance to re-evaluate their positions, explains Pete Najarian. Personally, I like this name going forward.

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CALL THE CLOSE

Dennis Gartman: Buy gold in euro terms.

Pete Najarian: I like Joy Global.

Joe Terranova: I'm a seller of gold and a buyer of oil .

Steve Grasso : I’m a buyer of Apple .


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Trader disclosure: On February 26, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Kaminsky Owns (EPV); Kaminsky Owns (LULU) Puts; Najarian Owns (AKAM) Call Spread; Najarian Owns (BAC) Call Spread; Najarian Owns (CMC) Call Spread; Najarian Owns (JDSU) Calls; Najarian Owns (MYL); Najarian Owns (TEVA), (TEVA) Puts; Najarian Owns (HK) Call Spread; Najarian Owns (HOLX) Calls; Najarian Owns (TEVA), (TEVA) Puts; Najarian Owns (MYL); Najarian Owns (JOYG); Najarian Owns (PFE); Najarian Owns (CELG); Najarian Owns (CEPH) Call Spread; Kelly Owns (AMZN) Calls; Kelly Owns (ELX) Calls; Kelly Owns (HOV) Calls; Terranova Owns (JPM), (AAPL), (EMC), (QCOM), (GOOG), (MSFT), (DELL), (IBM), (MSFT); Terranova Owns (GLD) March Puts; Terranova Is Long April, December Oil Futures; Terranova Is Long Oil Futures (April 2010, December 2010); Grasso Owns (AAPL)
Grasso Owns (BAC); Seymour Owns (AAPL), (BAC), (F), (INTC), (PBR), (TSL)

For Tim Seymour:
Seygem Asset Management Owns (POT)

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)

For Steve Grasso
Stuart Frankel And Its Partners Own (ABX)
Stuart Frankel And Its Partners Own (BAC)
Stuart Frankel And Its Partners Own Gold
Stuart Frankel And Its Partners Own (SDS)
Stuart Frankel And Its Partners Own (TOL)
Stuart Frankel And Its Partners Are Short (QQQQ)

For Whitney Tilson
Funds Managed By Whitney Tilson Owned (BRK.A), (BRK.B) On 2/25/10

Tilson Owned (BRK.A), (BRK.B) On 2/25/10

For Dennis Garwtman
Funds Managed By Gartman Are Short S&P 500
Funds Managed By Gartman Are Short Euro
Funds Managed By Gartman Are Short Yen
Funds Managed By Gartman Are Short Steel
Funds Managed By Gartman Are Long Gold
Funds Managed By Gartman Are Long Natural Gas
Funds Managed By Dennis Gartman Are Short Yen, Are Long Canadian Dollar, Are Long Australian Dollar
Funds Managed By Dennis Gartman Are Short (NUE)
Funds Managed By Dennis Gartman Are Short (SPY)
Funds Managed By Dennis Gartman Are Short S&P 500
Funds Managed By Dennis Gartman Are Long Gold
Funds Managed By Dennis Gartman Are Short British Pound
Funds Managed By Dennis Gartman Are Long Australian Dollar
Funds Managed By Dennis Gartman Are Long Canadian Dollar
Funds Managed By Dennis Gartman Are Short Euro

For Mike Khouw
Cantor Fitzgerald & Co. Is A Market Maker In (SPY)

For Brian Kelly
Kanundrum Capital Owns (DB)
Kanundrum Capital Owns (CS)
Kanundrum Capital Owns (C)
Kanundrum Capital Owns (JPM)
Kanundrum Capital Owns (GLD)
Kanundrum Capital Owns (GDXJ)
Kanundrum Capital Owns (BRCM)
Kanundrum Capital Owns (QCOM)
Kanundrum Capital Owns (VMW)
Kanundrum Capital Owns (ELX)
Kanundrum Capital Owns (QLGC)
Kanundrum Capital Is Long U.S. Dollar
Kanundrum Capital Is Short (GS)
Kanundrum Capital Is Short (JWN)
Kanundrum Capital Is Short Euro
Kanundrum Capital Is Short Japanese Yen
Kanundrum Capital Is Short Swiss Franc
Kanundrum Capital Is Short Singapore Dollar

Other Relevant Disclosures:
Terranova Owned (QCOM) On 2/1/10
Najarian Owned (PFE) On 2/2/10


CNBC.com with wires

  Price   Change %Change
S&P 500
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AFF
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BRK.A
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DE
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ENDP
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ASOE
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FXC
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FXF
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JDSU
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JPM MLP ETN
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KO
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KRE
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MS
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NUE
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AAPL
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